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Synnex (SNX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

Synnex (SNX) closed the most recent trading day at $103.99, moving -1.67% from the previous trading session. This change lagged the S&P 500's 0.3% loss on the day. Meanwhile, the Dow lost 0.54%, and the Nasdaq, a tech-heavy index, lost 0.41%.

Prior to today's trading, shares of the high-tech contractor had gained 1.4% over the past month. This has outpaced the Computer and Technology sector's loss of 0.49% and the S&P 500's loss of 0.43% in that time.

SNX will be looking to display strength as it nears its next earnings release. In that report, analysts expect SNX to post earnings of $2.71 per share. This would mark year-over-year growth of 13.87%. Meanwhile, our latest consensus estimate is calling for revenue of $5.53 billion, up 11.26% from the prior-year quarter.

SNX's full-year Zacks Consensus Estimates are calling for earnings of $11.91 per share and revenue of $22.21 billion. These results would represent year-over-year changes of +9.37% and +10.75%, respectively.

Investors might also notice recent changes to analyst estimates for SNX. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.15% higher within the past month. SNX currently has a Zacks Rank of #2 (Buy).

Digging into valuation, SNX currently has a Forward P/E ratio of 8.88. For comparison, its industry has an average Forward P/E of 33.57, which means SNX is trading at a discount to the group.

Also, we should mention that SNX has a PEG ratio of 0.74. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Business - Software Services stocks are, on average, holding a PEG ratio of 3.57 based on yesterday's closing prices.

The Business - Software Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 61, putting it in the top 24% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNX in the coming trading sessions, be sure to utilize Zacks.com.

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